|[November 19, 2012]
INSIDE Secure to Acquire Embedded Security Solutions (ESS), a Security Specialist in the Mobile and Networking Markets
AIX-EN-PROVENCE, France --(Business Wire)--
INSIDE Secure (NYSE Euronext INSD.PA) today announced that it has
entered into an agreement to purchase Embedded Security Solutions (ESS),
a high expertise business which designs and develops encryption-related
security hardware intellectual property (IP) and software for a variety
of industries, including the mobile and networking markets. The
transaction is expected to close before the end of 2012 subject to
certain customary closing conditions. The Supervisory Board of INSIDE
Secure has unanimously approved the transaction.
This strategic acquisition will enable INSIDE Secure to reinforce its
position as a key player in the fast-growing security solutions market:
ESS brings to INSIDE Secure complementary offerings for a complete
security architecture, as well as additional solutions for securing
both content (Digital Rights Management or "DRM") and data exchange
(Virtual Private Network or "VPN");
ESS complements INSIDE Secure's know-how with a talented team of 79
highly qualified employees located in Europe, Asia and in the US, as
well as its extensive and highly regarded security intellectual
property and technology portfolio, which aligns with INSIDE's
long-term strategy to generate its own IP licensing revenue;
This acquisition will allow INSIDE Secure to access a wider customer
base in the mobile, content provider and network industries that serve
a variety of application markets (smart grids, automotive, gaming and
By leveraging the strong capabilities of INSIDE Secure's existing
Mobile NFC and Digital Security businesses, the combined offer should
lead to additional sales in high growth markets.
At closing, INSIDE Secure will pay USD38 million in cash subject to a
working capital adjustment, and up to an additional USD10 million
subject to completion of certain post-closing transactions. The
transaction is expected to be accretive to INSIDE Secure's 2013 adjusted
operating and net results, and to enhance INSIDE Secure's gross margin.
Commenting on this announcement, Rémy de Tonnac, chief executive officer
of INSIDE Secure, said: "This transaction is an important opportunity
to extend our position in the security value chain and reinforce our
global offer in high-end security solutions. It will enable us to
complement our product and solution portfolio in Mobile NFC and Digital
Security and enhance our customer offerings in fast-growing markets. The
talented ESS team who will be joining will contribute their know-how an
expertise to advancing our innovative technologies, and help us address
new security markets."
Overview of ESS know-how, products and expertise
ESS designs, develops and sells a range of embedded security solutions,
encompassing hardware IP and software. It offers a host of security
solutions tailored for businesses and consumers on the move.
The ESS portfolio offer includes a comprehensive suite of embedded
security solutions which include semiconductor IP, security toolkits and
DRM solutions that address both client- and server-side security.
The solutions are centered on the use of encryption algorithms and
security blocks to protect data and ensure confidentiality, integrity
and availability. ESS offers three product lines: a Content Protection
product line, a Security Toolkit product line and a Semiconductor IP
ESS products are used in hundreds of millions of mobile and networking
products to ensure data privacy for businesses and individuals, and are
sold to a variety of tier-one brand name customers, such as
Alcatel-Lucent (News - Alert), Cisco, HBO, LG, Motorola, Nokia, Samsung, Sky and Texas
ESS recorded2 net revenue of USD25.3 million in 2011, with
gross margins exceeding 90 percent and operating income of USD6.3
million. For the first nine months of 2012, the net revenue was USD21.4
million and the operating income USD6.2 million.
Conference call details
Rémy de Tonnac, Chief Executive Officer of INSIDE Secure, jointly with
Richard Vacher Detournière, General Manager and Chief Financial Officer,
will comment on the acquisition of ESS and will be available to answer
questions during a conference call to be held on 19 November 2012 at 3pm
CET / 2pm GMT / 9am EST. The call will be held in English.
To participate in the conference call, you may call the following
numbers prior to the scheduled start time: +33 (0) 1 70 77 09 40
(France) or +44 203 367 9453 (United Kingdom) or + (1) 866 907 5923
This press release and other presentation materials will be available on
INSIDE Secure's website: www.insidesecure.com.
A replay of the conference call will also be available approximately two
hours following the conference call and for 90 days on the Group's
About INSIDE Secure
INSIDE Secure (NYSE Euronext Paris FR0010291245 - INSD.PA) is a leading
designer, developer and supplier of semiconductors, embedded software
and platforms for secure transactions and digital security. INSIDE
mobile NFC, secure payment and digital security products provide
security for a wide range of information processing, storage and
transmission applications. The company's customers are found in a wide
range of markets, including mobile payment, identification documents,
access control, transit, electronic device manufacturing, pay television
and mobile service operators. For more information, visit www.insidesecure.com.
This press release contains certain forward-looking statements
concerning the INSIDE Secure group. Although INSIDE Secure believes its
expectations to be based on reasonable assumptions, they do not
constitute guarantees of future performance. The group's actual results
may accordingly differ materially from those anticipated in these
forward-looking statements owing to a number of risks and uncertainties.
For a more detailed description of these risks and uncertainties, please
refer to the "Risk Factors" section of the annual financial report of 27
April 2012, available on www.insidesecure.com.
1 INSIDE Secure uses performance indicators that are not
strictly accounting measures (adjusted operating result, and adjusted
income /(loss)). These indicators are not defined under IFRS, and do not
constitute accounting elements used to measure the group's financial
performance. They should be considered in addition to, and not as a
substitute for, any other operating and financial performance indicator
of strict accounting nature, as presented in the Group's Consolidated
Financial Statements and the corresponding notes. The Group uses these
indicators because it believes they are useful measures of its operating
performance and of its operating cash flow generation.
2 Unaudited, US GAAP
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